Written By: Willy Beaman
If you are on your way to kickstart a new business, besides researching the things you need to do, it would be prudent to look into those you should avoid doing, so with that in mind, here are the top 5 mistakes to dodge.
1) Not creating a detailed business plan
To know whether your business idea can be turned into a lucrative business proposition, you need to give it some structural backup, which means that you need a business plan. Starting a business without a detailed business plan, especially for someone with less experience, is tantamount to being doomed to fail in advance.
Writing a detailed plan will require you to define your business model, market trends, objectives, and projections which will take some time and research. Naturally, it would be senseless to stick rigidly to a plan if you see that it isn’t working and that something needs to be changed but a comprehensive plan acts as a guide in a crisis.
2) Diving unprepared to the market
Your business ideas sound wonderful to you, your friends and your grandmother but can the products actually be sold? One of the reasons you need to do market research before you launch your product is to get to know your audience. You need to know who would be buying your product so you can shape your marketing strategy and even tweak the product itself if there is a need for it.
You would also need to test your products before they launch to ensure you will be marketing a quality product that can save you both time and finances and prevent staining your reputation. Market research helps you detect more business opportunities as well as different tools which can facilitate the various aspect of your business.
3) Not tending to your finances
One thing you have to be clear of is that, in all probability, your small business will not make a substantial amount of money in that first period. This means you have to plan your finances wisely to make sure that you have enough to last through that first dry period.
Traditional bank loans might not be the best solution since their conditions can be quite strict and uninviting to a new business. However, luckily, there are other options perfectly tailored for a small business such as encouraging unsecured business loans which take no more than 5 minutes to apply for and 24 hours to know the final decision. And the best part is there is no need for your personal assets to become the collateral.
4) Disregarding the competition
You shouldn’t imitate your competition but ignoring it is also not a prudent solution – observing them and their products will first and foremost provide you with an image of your competitive advantages and disadvantages compared to the others. This is a necessary move and it serves as either a wakeup call to change something or a motivational boost to continue at it.
There are many sources you can check out: their websites and blogs, annual reports and accounts, presentations, magazine articles, etc., and they can help you learn information on their cost structure, promotional activities and budget allocations, sales and profit figures, as well as their retention rates. This can help you concoct strategies to create a competitive advantage.
5) Going at it alone
No matter how skillful and enthusiastic you are, it is not practical to try and manage everything on your own. Having too many obligations leads to making mistakes and that can cost you more than hiring help. Also, if you hire somebody with experience, you will have peace of mind regarding that business aspect of your small business.
If you are a workaholic, don’t worry, you will still have plenty to do even with a few employees: you would have to assess which skill you need the most, who to hire, and most importantly, how to delegate tasks to achieve maximum efficiency.
Starting a new business can be challenging and preventing certain mistakes from happening will give you a stronger head start so you can sail the seas of entrepreneurship as smoothly and successfully as possible.
I’m Willy Beamen, contributor for Bizzmarkblog with 15 years of experience from Sydney, Australia. My work is mostly focused on helping small business owners and local startups get off the ground and expand